Diversified Manufacturing Leads Jabil’s Third Quarter Growth
In spite of a slow economy, Jabil’s Diversified Manufacturing sectors contributed to strong growth. Earnings before interest, taxes, depreciation and amortization (EBITDA) in the quarter expanded to $275 million, or 6.5% of revenue, the highest level since the fourth fiscal quarter of 2005.
Jabil’s Third Quarter Diversified Manufacturing, currently comprising 44% of Jabil’s business, is steadily growing at 22% year over year (YOY). As a result, Jabil is investing strategically to meet demand. In fact, by the end of the year, Jabil’s Wuxi, China plant will double in square footage and a new plant will be completed in Chengdu, China, by our first fiscal quarter of 2013.
Because Jabil has diversified its business strategically, it has been able to grow steadily in a down economy. In fact, Jabil is strategically positioning its business for strong future income growth. Investments in specialized services, healthcare, and industrial, along with a sustained competitive position in traditional markets, means Jabil is poised for long-term high-quality growth, revenue and earnings.
Superior Long –Term Performance
In reality, Jabil expects superior long-term performance. For example, as of 2011, there were 163 Fortune 500 companies with revenue over $16 billion a year. Not a single one of them posted higher growth in revenue, EBITDA, and GAAP EPS than Jabil over the 17-year period since Jabil went public in 1994. In addition, since 2008, only five have reported higher growth than Jabil: Apple, Intel, and three financial institutions, JP Morgan, Wells Fargo and Prudential.
By strategically offsetting declines in traditional EMS business with steady growth in diverse areas like specialized services, healthcare, and industrial, Jabil insulates investors and customers from economic turbulence. That’s why Jabil much more than a traditional EMS company. In fact, recently, Financial Analyst firm, Raymond James chose Jabil as its best pick.
Here’s what Brian Alexander, Managing Director of Raymond James & Associates, had to say about Jabil:
“We believe investors underappreciate the growing diversity of Jabil’s end markets and customer base, as well as its expansive manufacturing and service capabilities. Jabil is the best company in a rehabilitated industry, and with above-peer growth and margins poised to accelerate, we would aggressively buy the stock at current levels.”